Greenhouse gas emissions are projected to increase 52% by 2050 without new policies, but must be cut over 60% to limit global warming to 2 degrees. This presents both a climate challenge and business opportunities in clean energy, urban development, infrastructure, waste/water management, and carbon services. Firms can gain a competitive edge through innovation in climate-friendly technologies and help societies adapt to and mitigate climate change.

1. Climate Change and
Business Opportunities for
Consultancy and Engineering
Pablo Cesar Benitez, PhD
World Bank Institute

2. Contents
• The Challenge
• The Opportunities for Businesses
• Benefits of Climate Action
• Clean Energy
• Urban Development
• Infrastructure
• Waste/Water
• Carbon Services
• Innovation
• Summary
• Questions

3. The Climate Change Challenge: Moving Away from the Status Quo
World’s Greenhouse Gas Emissions (Index 2005=100) (OECD, 2011)
Greenhouse gas emissions are projected to increase by 52% by 2050 compared to 2005 levels if no new
policies are introduced.
World leaders have agreed to limit global warming to 2 degrees above pre-industrial levels.
By 2050, emissions would have to be cut by over 60% relative to a business-as-usual scenario in order
to give a reasonable chance of staying below this warming target.
Greenhouse gas emissions are projected to increase by 52% by 2050 compared to 2005 levels if no new
policies are introduced.
World leaders have agreed to limit global warming to 2 degrees above pre-industrial levels.
By 2050, emissions would have to be cut by over 60% relative to a business-as-usual scenario in order
to give a reasonable chance of staying below this warming target.

4. The Climate Change Challenge: Decoupling Environmental Impacts
GDP
Energy Supply
Decoupling Trends. OECD
Index, 1990 = 100
Energy Sector Decoupling:
•Decouple energy from growth: economic growth without a
corresponding increase in energy use.
•Decouple emissions from energy: energy demand growth
without a corresponding increase in GHG emissions.
Energy Sector Decoupling:
•Decouple energy from growth: economic growth without a
corresponding increase in energy use.
•Decouple emissions from energy: energy demand growth
without a corresponding increase in GHG emissions.

5. Climate Action: Is this a cost or an opportunity for businesses?
Firms have incentives to design new products and services that help
societies adapt to climate change and mitigate greenhouse gas emissions.
In the short-run, upfront investments (both public and private) are
necessary to catalyze innovation. In the long-run, resources, expertise and
business ability can turn climate action into a business opportunity.
Source: WDR 2010

6. Opportunities for businesses
Clean Energy
Urban Development
Waste/Water
Carbon Services
Businesses responding to climate change gain a
competitive edge from technology leadership.
Firms can also address flaws within their own
operations, supply chains, and markets to reduce climate
risk.
Climate Action Benefits to Businesses:
•Accelerate innovation in high-demand, climate-friendly
services and technologies
•Avoid costs, manage liabilities, build resilient
communities
•Expand market share and create wealth
•Build corporate reputation and good citizenship
Infrastructure

7. Opportunities for businesses: clean energy
Clean Energy
Urban Development
Waste / Water
Carbon Services
According to the IEA, $24 trillion of investment is
needed by 2020 to keep temperature rises
below the 2 degrees goal.
This entails development and implementation of a
range of technologies:
Infrastructure

8. Opportunities for businesses: clean energy
Clean Energy
Urban Development
Waste / Water
Carbon Services
Energy Efficiency is fundamental.
Opportunities span across residential, commercial and
industrial buildings and processes.
Business opportunities and Service needs:
•Energy Efficiency Technologies
• High efficiency, modified function
•Load Reduction
• Insulation, passive strategies (shading, roof
color)
•Energy Management
• Automation, Smart Grid
•Energy Efficiency Assessments
• Auditing, measurement standards
Infrastructure

9. Opportunities for businesses: urban development
Clean Energy
Urban Development
Waste/Water
Carbon Services
Cities need to be planned differently: low carbon, mass
transit, climate resilient
E.g. Barcelona’s density is more than 28 times higher than
Atlanta’s. This means Atlanta is covered by a transport
network 28 times larger than Barcelona’s while carrying the
same number of people. Key take-away: spatial structures
matter.
Infrastructure
Source: Bertaud 2010

10. Opportunities for businesses: urban development
Clean Energy
Urban Development
Waste/Water
Carbon Services
Climate Action in Urban Development: services and
investments needed
•Urban Planning and Design
•Urban Forestry, Rooftop Gardens
•Efficient Transportation:
• Bus Rapid Transit Systems
• Trolleybuses and other electric systems
Infrastructure
Source: EPQ
Trolebus in Quito, Ecuador.
Funded by Spain
Trolebus in Quito, Ecuador.
Funded by Spain

11. Opportunities for businesses: infrastructure
Clean Energy
Urban Development
Waste/Water
Carbon Services
Required investment in climate change adaptation are
significant.
A World Bank study found that between 2010 and
2050, the cost of adapting to a 2 degree C warmer
world by 2050 is $70 to $100 billion a year.
Specific climate-justified measures are needed to put
in place safe tolerances to climate change impacts and
uncertainties in water services, energy and industry.
This includes development and deployment of
infrastructure adapted to extremes, including water
supply and treatment, drainage, hydropower and
shoreline management.
Infrastructure
Source: WB 10 Yrs of Experience in Carbon Finance

12. Opportunities for businesses: infrastructure
Clean Energy
Urban Development
Waste/Water
Carbon Services
Strengthening infrastructure against climate change
could increase overall adaptation cost by 10-20%.
Specific infrastructure measures requiring investment
include:
•Water resource infrastructure
•Transport infrastructure
•Coastal infrastructure
•Urban infrastructure
Infrastructure
Source: Iberdrola

13. Opportunities for businesses: waste water
Clean Energy
Urban Development
Waste/Water
Carbon Services
Water resources and water services will be most
affected by the expected impacts of climate change –
flooding, storms, melting ice and sea-level rise.
For wastewater, businesses can focus on facilities and
production operations that may need redesigning for
potential water savings, water recovery and
reuse/recycling technologies and systems.
Infrastructure
Source: WDR 2010

14. Opportunities for businesses: waste water
Clean Energy
Urban Development
Waste/Water
Carbon Services
Adaptive water management will focus on
technologies and products such as:
•Increasing water availability, increasing storage
capacity, desalination, and water harvesting schemes
in agriculture
•Improving water-use efficiency, e.g. recycling water or
reducing losses in existing water systems
•Reducing water in demand for irrigation, enhancing
water infrastructure designs
Infrastructure

15. Opportunities for businesses: carbon services
Clean Energy
Urban Development
Waste/Water
Carbon Services
The Clean Development Mechanism has flourishing
with business opportunities for almost a decade. Yet,
demand has collapsed in the last couple of years.
Currently, there are about 6,000 CDM projects in total.
CDM transactions have catalyzed over $100 billion of
mostly private capital over 2002- 2008. Transactions in
2008 alone amounted to nearly $7 billion.
Future climate agreements may result in renewed
demand, probably under a new market mechanism.
Infrastructure
Locations of CDM projects
Source: CDM UNFCCC

16. Opportunities for businesses: carbon services
Clean Energy
Urban Development
Waste
Carbon Services
CDM provided a range of business opportunities
throughout the cycle:
1.Services for Project Preparation, PIN, PDD
2.Project Development
3.Monitoring, Reporting and Verification
4.Financial Services
Infrastructure
CDM Project: Mexico La Venta II Wind Farm.
Funded by Spanish Carbon Fund.
CDM Project: Mexico La Venta II Wind Farm.
Funded by Spanish Carbon Fund.

17. Opportunities for businesses: innovation and high tech firms
Clean Energy
Urban Development
Waste
Carbon Services
Infrastructure
Technological innovation and its associated
institutional adjustments are key to managing climate
change at reasonable cost.
Innovation initiates technological competition between
new and traditional technology firms, and improves
international competitiveness of “first movers”.
Spillover effect arises from global trade,
communications and technology transfer of such
innovation.
This diffusion of innovation reaps positive impacts on
business economics and macroeconomics.

18. Summary: key points
• The challenge is great
• Emissions would have to be cut by over
60% relative to a business-as-usual by 2050
• Adapting is imperative
• Address energy systems, cities, infrastructure and water
management to meet the emissions goal
• Business have an opportunity
• They can decrease costs, increase market share and
heighten competitive edge
• Taking climate action involves innovation
• technologies, products and services that help societies adapt
to climate change and mitigate greenhouse gas emissions

19. Questions